Tesla is a brand that is often associated with innovation, creative ideas, and nuanced approaches. Moreover, the company is perceived as technologically advanced and attractive to consumers interested in products that encompass comfort, sustainability, personalization, and innovative development. Tesla offers several options of automobiles for sale, but one that stands out in regards to performance, positioning, unique features, and consumer demand.
Tesla Model S was the world’s first premium fully electric sedan. The automobile was first released in 2012 but is still popular among consumers (Tesla, 2022b). The product was unique on the market, which implies that the blue ocean strategy has allowed the company to avoid competition. The advanced features of the car, as well as the services provided by the car manufacturer, placed it ahead of its competitors.
For upper-income consumers who aim to invest in technology that incorporates comfort, safety, and futuristic features, Tesla Model S is a car that resembles a transportation means that will be used in the future. The brand positions itself as one aiming to change the automobile industry by giving consumers opportunities to invest in more sustainable options.
Tesla was named after the inventor Nikola Tesla who designed the electricity supply system; one used to charge the automobiles, including Model S. The logo, similar for all Tesla automobiles and for the corporation itself, is the letter T, a simplistic yet modern design symbolizing the electric motor.
The company’s image is that of a futuristic corporation providing high-quality products that are not only innovative but also revolutionary. The focus on software and technological advancements and the aim to change the automobile industry are the factors most commonly associated with the brand (Chen & Perez, 2018). Thus, the entity portrays itself as ethical, providing high-tech solutions to current environmental problems and technological advancements.
Features and Benefits
Tesla’s main advantage is the fact that the cars manufactured by the company, including the Model S, are electric automobiles. Moreover, such features as automatic driving, personalized software, and fast acceleration create more consumer loyalty and motivation to invest in the product (Chen & Perez, 2018). As a result, Tesla Model S is ahead of its competitors since the buyers can access the innovative features provided by the company.
Despite the innovative features and the nuanced approach to transportation, Tesla Model S has a rather traditional design that resembles most sedans. It is important to mention that the company is relatively new, and major investments are allocated to technology rather than the appearance of the cars.
Model S is covered by the most extensive warranty provided by Tesla. Namely, the warranty covers certain expenses for eight years after purchasing or after 150,000 miles, depending on the first reached limit (Tesla, 2022a). Thus, drivers can repair their vehicles and replace parts if the damage has occurred during regular use.
After purchasing Tesla Model S, the customers can make appointments for reparations through an app or by contacting customer support. Moreover, as mentioned prior, fixing a car is covered by insurance if the damage is assessed as one acquired through regular use.
Tesla distributes its products exclusively, disregarding the traditional distribution model through dealership franchising. Due to the fact that the company only produces electric automobiles, advertising these cars over ones that run on gasoline would mean diminishing the features of traditional vehicles. Thus, sales would decrease in other compartments, which is not an effect that dealerships would agree to. Thus, Tesla’s model contrasts with the standard one.
Channels of Distribution
Tesla distributes the Model S cars through company-owned platforms. Namely, customers can purchase automobiles through specialized Tesla stores and online (Thomas & Maine, 2019). The exclusivity of the channels of distribution limits sales yet attracts customers through the niche approach, creating an environment of singleness and particularity. The company has physical stores, namely more than 400, the majority of which are in the US alongside Europe, Asia, and Australia (Agnihotri & Bhattacharya, 2022). As a result, the channels of distribution are concentrated in highly concentrated urban areas. However, consumers from other areas of the world can also access Model S cars through the online platform. Consumers can customize certain features before the automobile is delivered to the place of destination.
Type of Distribution
The type of distribution implemented by the company in regards to all the products is through direct sales. Thus, consumers purchase the products directly from the manufacturer, which implies that no third parties are involved in the transactions. As a result, Tesla acquires the profit without having to consider the commissions for dealerships and similar types of distribution channels. The approach is effective in having direct contact with the buyers yet limits the organization in relation to maximizing sales and expanding on the market.
Product promotion is especially unique in regards to Tesla Model X since the company is popular enough to disregard standard advertising channels. Moreover, the company’s objective is to maximize technology and innovation through investment, which means minimizing marketing to address product efficiency and reliability. However, such objectives do not compromise product promotion, as will be discussed further.
The messaging used in product promotion for marketing Tesla Model S is that the car is a combination of the best features offered by other car manufacturers with additional benefits and without limitations. Thus, the product is positioned as the best automobile within its category as it is a combination of safety, comfort, and efficiency (Tesla, 2022b). As a result, the automobile is unique and more advanced than similar analogies.
TV advertisements and billboards are unnecessary due to Tesla’s reputation. The social media attention based on the revolutionary approach of the company facilitates enough revenue (Thomas & Maine, 2019). As a result, advertisement is the brand’s name and the corporate values rather than marketing strategies and promotion ads.
Personal selling is conducted in Tesla stores, where trained sales assistants are able to convince consumers that Model S is a reliable alternative to similar cars that run on gas. Since the automobiles are only sold in company-owned stores, the personnel responsible for direct contact with potential customers are able to advertise electric cars without having to consider limitations related to the need to sell cars that run on gas.
Tesla does not facilitate consumer demand through sales promotions since Model S is an exclusive automobile with a niche target audience. When it comes to luxury goods, companies refrain from standard techniques such as seasonal sales and promotions since it can damage the value of the car, facilitating the exclusivity to turn into affordability.
The company does not have a particularly strong public relations department. However, the spokesperson for Tesla and the person who uses his platform to share new ideas or address public opinion is Elon Musk. Musk is considered the face of the company as he is the CEO and often addresses common questions, controversies, and topics of discussion related to Tesla and Model S in particular.
Tesla is not known for offering attractive prices due to the major investment needed for the software, technological advancements, and nuanced features offered by the company. The price range of the Model S, in particular, is higher than the average car on the market, putting the automobiles in the luxury segment.
The objective of the pricing strategy is to lower the cost of the cars as much as possible since the aim can address sustainability issues and facilitate more extensive use of electric cars as opposed to gas ones. The objective, however, implies the need to offer more affordable products, which is yet to be put into practice due to the high costs of production and research.
The company strives to become more accessible in regard to prices. The strategy is to move from the high-end to the mass market by providing vehicles that are more affordable (Chen & Perez, 2018). Thus, in theory, Model S is to become an affordable car instead of being considered a luxury because of the price. This can be achieved through government assistance, as exemplified in China’s case with tax cuts and subsidy programs for consumers who decide to invest in electric vehicles (Välikangas, 2018). As a result, the strategy will facilitate more individuals to purchase Model S Teslas.
Impact of Competition
While electric cars are currently being manufactured by most major corporations, the Model S is more expensive than the average car in the segment. Researchers mention this factor led to a market loss in Europe, where people started investing in the less costly Volkswagen alternatives (Agnihotri & Bhattacharya, 2022). Reducing the cost of the cars can mitigate the challenge of high competition.
Model S Tesla is a unique product that satisfies consumers’ needs related to comfort, efficiency, and performance. While the marketing strategies, branding, and distribution facilitate high demand, the price of the automobile is a limitation that allows competitors to have an advantage over Tesla.
Agnihotri, A., & Bhattacharya, S. (2022). Tesla Innovation and growth at the cost of quality? Web.
Chen, Y., & Perez, Y. (2018). Business model design: Lessons learned from Tesla Motors. Towards a Sustainable Economy, 53–69. Web.
Tesla. (2022a). Vehicle warranty. Tesla. Web.
Tesla. (2022b). About Tesla. Tesla. Web.
Thomas, V. J., & Maine, E. (2019). Market entry strategies for electric vehicle start-ups in the automotive industry – lessons from Tesla Motors. Journal of Cleaner Production, 235, 653–663. Web.
Välikangas, L. (2018). Forum on Tesla and the Global Automotive Industry. Management and Organization Review, 14(3), 467–470. Web.